Before expiration, the time value of an at-the-money call option is usually
A)positive.
B)equal to zero.
C)negative.
D)equal to the stock price minus the exercise price.

Question

Quizplus · Accepted Answer

The time value of an at-the-money call option is positive because it reflects the potential for the option to gain in value before expiration due to changes in the underlying stock price.

Before Expiration, the Time Value of an At-The-Money Call Option